Feb. 25 (Bloomberg) -- Affymax Inc. fell the most ever
after the drugmaker and partner Takeda Pharmaceutical Co.
voluntarily recalled an anemia treatment for kidney dialysis
patients after reports of three fatal reactions.

Affymax declined 85 percent to $2.42 at the close in New
York, the biggest one-day drop since the stock began trading in
December 2006. The shares of the Palo Alto, California-based
company lost 77 percent in the past 12 months.

All lots of its drug Omontys, sold in 10 milligram and 20
milligram vials, have been recalled and health-care
professionals have been told that patients shouldn’t receive the
medicine, the companies said in a statement. Affymax hasn’t
figured out why people taking the drug were having the reactions
or what’s causing them, Chief Executive Officer John Orwin said.

“It’s premature to speculate on the timing or the next
steps,” Orwin said on a conference call today. The adverse
reactions happened to patients only on their first dose of the
drug, and only in its intravenous form, Orwin said.

The company is analyzing data from patients with the
reactions to try and find a cause, as well as looking at
manufacturing, drug handling and drug administration as possible
reasons.

Split Costs

Takeda and Affymax will split the costs of the recall in
the U.S., Orwin said. Affymax also plans to look at its expenses
and will closely manage its cash, said Chief Financial Officer
Herbert Cross.

M. Ian Somaiya, an analyst with Piper Jaffray & Co. in New
York, said he expected it to trade at little more than the value
of the cash the company had on the books.

Investors will “take into account the lack of visibility
on reintroduction of the drug and, more importantly, the
difficult task of repairing a negative safety perception,” he
said in a note to clients. He downgraded the shares to neutral.

The U.S. Food and Drug Administration, which approved
Omontys in March, agreed to the recall, the companies said.
Omontys generated $10.4 million, or 76 percent, of Affymax’s
$13.6 million in revenue during the third quarter, the company
said on Nov. 8.

Affymax’s drug is used to alleviate anemia in kidney
dialysis patients, who can suffer from low red blood cell
counts. There have been 19 reports of anaphylaxis from U.S.
dialysis centers, three of which resulted in death, the FDA
said. Some patients were able to be resuscitated by doctors.

Fatal Reactions

The fatal reactions amount to 0.02 percent of some 25,000
patients who have received first-dose injections of Omontys,
Takeda and Affymax said in the statement. About 0.2 percent of
patients have had hypersensitivity reactions, a third of which
needed medical intervention.

The FDA is alerting health-care providers and patients of
the recall, which is due to reports of anaphylaxis, a “serious
and life-threatening” allergic reaction, the agency said in a
statement yesterday.

“Serious and fatal” hypersensitivity reactions have been
reported in some patients within 30 minutes of receiving their
first doses of the drug by intravenous injection, the FDA said
in the statement. There have been no reports of reactions in
subsequent doses or in patients that have finished their
dialysis session, the agency said.